Why Do Young Investors Care About ESG Investing?

24^th Jun 2025...

Scrolling through social media, it’s hard to miss posts on climate change, sustainable living or social justice. From trending hashtags to viral petitions, today’s youth are more aware and vocal about global issues than ever. But this awareness isn’t just limited to online activism. It’s shaping how they spend, save and grow their money.

Investment choices are no longer just about chasing returns. For young investors, values matter as much as profits. If a brand’s principles don’t align with theirs, they walk away. This mindset now extends to their investments, too.

This change isn’t just about personal choice. It’s about redefining what growth means—not just growing money but also helping the planet and society. This values-based thinking is shaping a new way people choose to invest.

Meaning of ESG investing

ESG investing is about supporting companies that care about Environment, Social impact and Governance. It means investing in businesses that are good for the planet, treat people fairly and run their companies in an honest and transparent way. It’s not just about making money, it’s about doing it responsibly. Here’s a simple breakdown of what each part of ESG means in investing:

Environmental (E)

This is about how companies impact the planet. Do they reduce pollution, use clean energy and manage waste properly? Investors prefer companies that care for the environment because they’re seen as better prepared for future challenges like stricter environmental laws. Businesses that use clean energy, electric vehicles and sustainable products often get higher scores in this area.

Social (S)

This is about how companies treat people—like employees, customers and communities. Companies that offer fair pay, respect diversity, and protect customer data are seen as responsible. But if a company faces worker complaints or data breaches, it can lose trust. Investors prefer companies that prioritize fairness and safety because they’re less likely to face public backlash.

Governance (G)

Governance is about how a company is run and the decisions it makes. It covers things like fair pay for top bosses, giving shareholders a say and making honest choices. Investors prefer companies that are open about their finances, have fair leadership and follow ethical rules. If company management is poor, it can lead to scandals, fraud or money troubles. This can cause its stock price to drop.

Reasons for the inclination towards ESG investing

Desire for ethical impact

Young investors don’t just want to grow their money, they want to make a difference. ESG investing allows them to support companies that care about big issues like climate change, fair wages and human rights. It’s a way to feel good about where their money is going, knowing it’s helping to create a better world.

Focus on sustainability

From reusable bottles to electric cars, people today are more focused on protecting the planet. This thinking applies to their investments. They prefer to back companies that are eco-friendly, reduce waste and create sustainable products. It’s not just about profits—it’s about supporting companies that care about the future.

Transparency and accountability

People today want to know the truth about where their money is going. They expect companies to be open about how they treat workers, protect data and stay ethical. ESG investing gives investors more visibility into a company’s behaviour. If a business hides things or has scandals, it’s quickly seen as a risky choice.

Moral alignment with brands

People want to invest in companies that match their personal values. If a business is known for treating workers badly or harming the environment, it’s less likely to get support. However, companies that promote fairness, equality and sustainability get more attention from investors. It’s about putting money behind companies that “do the right thing”.

Long-term vision over short-term gains

Instead of chasing fast money, many young investors focus on steady, long-term growth. They want companies that will be around for years, not just a quick profit today. Since ESG investing focuses on sustainable, future-ready companies, it fits perfectly with this mindset. They believe that long-term thinking pays off, both for their money and the world.

Endnote

If you care about making a positive impact with your investments, ESG investing might be your way forward. It’s a chance to grow your wealth while supporting companies that prioritise people, the planet and ethical business practices. By choosing ESG investments, you’re not just aiming for financial returns—you’re contributing to a more sustainable and fair future.

If you value simplicity and convenience in managing your money, Kotak 811 is a smart choice. It offers a fully digital banking experience, letting you open and operate your account from anywhere, without the need for paperwork or physical visits. Just like ESG investing, it aligns with the idea of modern, hassle-free solutions for a better future.

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